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Market Psychology

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Dictionary Says

Definition of 'Market Psychology'

The overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group's overall investing mentality or sentiment.

Investopedia Says

Investopedia explains 'Market Psychology'

While conventional financial theory describes situations in which all the players in the market behave rationally, not accounting for the emotional aspect of the market can sometimes lead to unexpected outcomes that can't be predicted by simply looking at the fundamentals.

Technical analysts use trends, patterns and other indicators to assess the market's current psychological state in order to predict whether the market is heading in an upward or downward direction.

Related Video for 'Market Psychology'

Articles Of Interest

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    An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.

  2. Market Mentalities: Bulls Vs. Bears

    Learn the importance of these opposing views on investing in the markets.

  3. How The Power Of The Masses Drives The Market

    Market psychology is an undeniably powerful force. Find out what you can do about it.

  4. 4 Psychological Traps That Are Killing Your Portfolio

    Sometimes your largest financial hurdle is our head. Learn about the common mind-traps that trip up investors.

  5. The Intelligent Investor: Benjamin Graham

    Learn about the man who mentored Warren Buffett, who eventually became the investing "Oracle of Omaha".

  6. How To Read The Market's Psychological State

    Discover what on-balance volume, accumulation/distribution and open interest can tell you about the market mood.

  7. Andre Kostolany: Germany's Stock Market Guru

    We can learn a lot from Kostolany and his "steady or shaky hand" investing philosophy.

  8. Brains Don't Always Bring The Bucks

    Common mistakes can prevent even the smartest investors from beating the market.

  9. Investing "Road Less Traveled" May Lead To Riches

    Using the same strategy year after year may be comfortable, but it's not always profitable.

  10. Basics Of Technical Analysis

    Learn how chartists analyze the price movements of the market. We'll introduce you to the most important concepts in this approach.
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